Nemetschek’s Q2 shows AEC demand for tech continues to grow

Nemetschek today reported results that show how the AEC world continues to grow into advanced design and engineering solutions — though building operations continues to lag behind the rest of the industry. The company says that continued digitalization, the support of governments and regulators who mandate BIM on projects and its focus on Open BIM solutions with a network of industry leaders led to success in Q2 — and that its plan to grow in North America, Asia, and Europe, as well as continued investment in cross-brand projects (and, of course, potential acquisitions) will fuel growth going forward.

Some details:

Total revenue in Q2 was €98 million, up 17% as reported and up 12% on an organic basis. For the half-year, revenue was €194 million, up 20% as reported and up 15% on an organic basis. Nemetschek had an unusually strong Q2 last year, so I don’t think we should read too much into what might otherwise seem a slowing in Q2 — but Q3 results will be an important indicator

Software revenue was the vast majority of the Q2 total, €93 million, up 16%

License revenue was up 6% to €48 million while maintenance and subscription revenue (in other words, recurring revenue) was up 28% to €45 million.

Recall that the Nemetschek Group is, in essence, a holding company for the Nemetschek, Graphisoft, Bluebeam, VectorWorks and other brands. While the company doesn’t offer specific brand progress, it groups them into Design, Build, Manage and Media. Their performance in Q2:

The Design group remains by far the largest in the Nemetschek family, with total Q2 revenue of €60 million, up 9% as reported. For the half-year, revenue was up 13% to €121 million as reported and up 11% on an organic basis. dRofus, acquired at the beginning of the year reported revenue of €3 million. Nemetschek also points out that Q2 revenue was dragged down a bit because a major release shifted into the second half of the year

The Build segment reported revenue of €29 million, up 40% as reported. For the half-year, the segment reported growth of 42% to €57 million, with the Design Data acquisition contributing €6 million; as a result, organic growth for the half-year was up 27%

The Manage segment remains tiny, with total revenue of €2 million, up 15% as reported, in Q2

Finally, revenue from the Media & Entertainment segment was €12 million, up 10%

By geo, revenue from outside Germany continues to grow. Germany still made up 30% of revenue in the first half (and grew by 11%), but revenue from outside Germany grew by 25% in H1. The company reports especially strong growth in the Americas, Asia and Scandinavia.

Nemetschek Board Spokesman Patrik Heider said that Nemetshek is “completely within the anticipated ranges for 2017. [Nonetheless,] The second quarter was certainly challenging for us – not only because we had a very strong quarter in the previous year, but also because one of our largest brands from the Design segment shifted its product release and the corresponding revenue from the second quarter to the second half of the year. This makes us even more positive in our outlook for the second half of this year. Nemetschek is well on the way to another record year in terms of revenue and earnings.”

As a result, the company confirmed its outlook for the rest of 2017: total Group revenue between €395 million and €401 million. That would be growth of 17% to 19% as reported and organic growth of 13% to 15%.